Guest Post: "Gold and Silver Stand-Off: Demarketing and Deep Value", by Paul Mylchreest
"The demarketing of gold may be close to running its course as it seems that sellers of paper gold instruments are attempting to induce one more sell-off to fully cover their diminishing short positions. Indeed, signs are emerging that the long Nikkei/short gold trade, which has done so much damage to gold’s price, is becoming problematic." -- Paul Mylchreest
Longtime readers will recall that my friend Paul and I both discovered the link between the yen and gold late last year. Working independently, Paul put his findings as a Long Nikkei--Short Gold where we've always proposed it's a more straightforward Long USDJPY--Short Gold trade. In the end, it doesn't really matter which vehicle is used as the long portion of this dominating trade. It's clear for all to see now that the BoJ and other central banks have worked aggressively since 2012 to devalue the yen, while at the same time crushing the paper price of gold.
In this new report, Paul gives us an update on his Long Nikkei--Short Gold thesis as well as several other global trends he's been monitoring. As usual, Paul does fantastic work here so it is imperative that you take the time to absorbe all of the information presented below.